The frustrated Lib Dem Cabinet minister broke rank with his colleagues, telling a conference that he was ‘at the limit of collective responsibility’.

Mr Cable cited a British company which needed 500 specialists, 250 of them from outside the European Union, which had only been given a quote of 30.

He told an audience of prominent business people and politicians at a Konigswinter conference in London that he was ‘not willing’ to defend the policy.

His aides later played down Mr Cable's remarks, saying he had no intention of quitting the government and that his comments on collective responsibility had been ‘tongue in cheek remark’.

A source close to the Business Secretary admitted that he had described the interim cap on migrants as damaging. 

The source added, ‘He is fully signed up to the Cabinet commitment to lower immigration but he feels that a future cap needs to be implemented flexibly.’

His remarks echo those of London Mayor Boris Johnson, who has branded the cap a ‘shambles’ and warned of the impact on the City of London.

Mr Cable also appeared to stray off message about the government’s programme of spending cuts and warned other European countries off following Britain’s example.

 ‘It is helpful on a political level to be sharing the pain of fiscal consolidation but economically there must be concern that EU countries are exporting deflation to each other through collective fiscal tightening,’ he said. 

‘There is a case for a differentiated approach, dependent on country circumstances, and also for recognising that there are structural imbalances reflected in the current account, given the lack of flexibility in monetary and fiscal policy,’ he added.

The Business Secretary had revealed divisions in the Cabinet over the summer over the cap on immigration policy.

Mr Cable said last month, ‘It's no great secret that in my department and me personally, we want to see an open economy, and as liberal an immigration policy as it's possible to have.’

But the coalition agreement between the Lib Dems and the Conservatives agrees that ‘there should be an annual limit on the number of non-EU economic migrants admitted into the UK to live and work. We will consider jointly the mechanism for implementing the limit.’

David Cameron made a cap on immigrants one of his key pledges at the general election.

The government has imposed a cap on work visas for highly-skilled migrants from outside the EU and is consulting on whether to make the cap permanent.

Ministers will still allow in 24,100 people until April 2011, down just 1,300 from next year

By Daily Mail